Century 21 Real Estate Corp. v. Sandlin

• Decision Date: 19 May 1988
• Docket Number: No. 87-1598,87-1598
• Parties: CENTURY 21 REAL ESTATE CORPORATION, a Delaware corporation, Plaintiff-Appellee, v. Billy SANDLIN, an individual, dba Century Investments & Realty, Defendant- Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1175

846 F.2d 1175

6 U.S.P.Q.2d 2034

CENTURY 21 REAL ESTATE CORPORATION, a Delaware corporation Plaintiff-Appellee, v. Billy SANDLIN, an individual, dba Century Investments &amp Realty, Defendant- Appellant.

No. 87-1598.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Nov. 12, 1987.

Memorandum Feb. 25, 1988.

Order and Opinion May 19, 1988.

Billy Sandlin, Newark, Cal., for defendant-appellant.

Michael Grow, Ward, Lazarus, Grow & Cihlar', Washington, D.C., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of California.

Before GOODWIN and FLETCHER, Circuit Judges, and KING, ^* District Judge.

ORDER

The memorandum disposition filed February 25, 1988, is redesignated as an authored opinion by Judge Fletcher.

OPINION

FLETCHER, Circuit Judge:

This is a trademark infringement and dilution action brought by Century 21 against one of its former real estate franchisees, Billy Sandlin. Upon termination of the franchise agreement, Sandlin changed the fictitious name under which he did business from "Century 21 Estates" to "Century Investments & Realty." The district court granted summary judgment to Century 21 and permanently enjoined Sandlin from using the new name. We affirm.

FACTS AND PROCEEDINGS BELOW

Century 21 operates a system of independently owned, franchised real estate brokerage offices throughout the United States and abroad. Its service mark "Century 21" is registered in the United States Patent and Trademark Office, which is prima facie evidence of Century 21's ownership and exclusive right to use the mark in commerce without restriction or limitation. Century 21 also owns several California service mark registrations. More than 6000 independently owned brokerages use the Century 21 trademarks, service marks, and trade name, and collectively advertise nationwide in print and television media.

Billy Sandlin is a real estate broker in Newark, California. From 1976 until December 1984, he was a Century 21 franchisee, doing business as (dba) "Century 21 Estates". Sandlin's contract required him, upon termination of the franchise, to discontinue using the mark "Century 21". He was terminated in December 1984. Sandlin changed his dba to "Century Investments & Realty" in January 1985, but his business continued to be listed in both the local telephone directory and the local real estate multiple listing service as Century 21 Estates. By his own admission, Sandlin chose his new dba so that his old customers could find him. He also advertised his business with a sign which Century 21 contended was significantly similar to its distinctive yellow, brown and white yard sign suspended from a yellow pole.

Century 21 moved the district court for summary judgment on seven counts: federal trademark infringement, 15 U.S.C. Sec. 1114; federal unfair competition, 15 U.S.C. Sec. 1125(a); California statutory trademark infringement, Cal.Bus. & Prof.Code Sec. 14340; dilution, Cal.Bus. & Prof.Code Sec. 14330; unfair competition, Cal.Bus. & Prof.Code Sec. 17200 et seq.; and California common law trademark infringement and dilution. The court granted summary judgment to Century 21 on every count, and Sandlin appealed, pro se, to this court. We have jurisdiction over the appeal under 28 U.S.C. Sec. 1291.

I. APPROPRIATENESS OF SUMMARY JUDGMENT

We review a grant of summary judgment de novo. Darring v. Kincheloe, 783 F.2d 874, 876 (9th Cir.1986). Viewing the evidence in the light most favorable to the non-moving party, we determine whether the substantive law was correctly applied and whether there is any issue of material fact. Id.

The district court correctly applied federal and California law to Century 21's trademark infringement and unfair competition claims, recognizing that the "crucial issue" is whether the defendant's use of the plaintiff's service mark or trade name creates a "likelihood of confusion" for the public. Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir.1987).

A. Elements of Federal Trademark Infringement and Unfair Competition Claims.

A claim of federal trademark infringement may be brought against any person who shall, without consent of the holder of the registered trademark,

use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive ...

15 U.S.C. Sec. 1114(1)(a). Neither actual confusion nor intent is necessary to a finding of likelihood of confusion. J.B. Williams Co. v. Le Conte Cosmetics, 523 F.2d 187, 191 n. 5, 6 (9th Cir.1975), cert. denied, 424 U.S. 913, 96 S.Ct. 1110, 47 L.Ed.2d 317 (1976).

Section 43 of the Lanham Act, 15 U.S.C. Sec. 1125(a), provides a cause of action for anyone injured by unfair competition:

(a) Any person who shall affix, apply, or annex, or use in connection with any goods or services ... any false description or representation, including words or other symbols tending falsely to describe or represent the same ... shall be liable to a civil action by ... any person who believes that he is or is likely to be damaged by the use of any such false description or representation.

The "ultimate test" for unfair competition is exactly the same as for trademark infringement: "whether the public is likely to be deceived or confused by the similarity of the marks." New West Corp. v. NYM Co. of California, 595 F.2d 1194, 1201 (9th Cir.1979) (citations omitted).

B. Analysis of the J.B. Williams Test.

The test for determining likelihood of confusion, as articulated in J.B Williams, 523 F.2d at 191, requires consideration of six factors:

1) the strength or weakness of the marks;

2) similarity in appearance, sound, and meaning;

3) the class of goods in question;

4) the marketing channels;

5) evidence of actual confusion; and

6) evidence of the intention of defendant in selecting and using the alleged infringing name.

Analyzing the undisputed facts before it according to the J.B. Williams test, the district court concluded that Sandlin's use of the word "Century" and his yard sign created a likelihood of confusion for the public. A trial court's determination of the likelihood of confusion is reviewed by this and most other circuits under the "clearly erroneous" standard. Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1355-56 (9th Cir.1985). ¹ The district court's conclusion was not "clearly erroneous", since evidence for each of the six factors points to a likelihood of confusion.

1) Strength of the mark. "A 'strong' mark is one which is used only in a 'fictitious, arbitrary and fanciful manner', whereas a 'weak' mark is a mark that is a meaningful word in common usage, or is merely a suggestive or descriptive trademark." J.B. Williams, 523 F.2d at 192 (citations omitted). Marks may be strengthened by extensive advertising, length of time in business, public recognition, and uniqueness.

Evidence of the strength of Century 21's mark includes the fact that it has expended several million dollars in advertising real estate services rendered in connection with the "Century 21" mark, and that the mark has been used in connection with real estate sales in excess of one billion dollars. In addition, at least two federal district courts have found Century 21's mark to be "strong". Century 21 Real Estate Corp. v. Century Resorts International, Inc., 211 U.S.P.Q. (BNA) 227 (N.D.Ill.1981); Century 21 Real Estate Corp. v. 21st Century Construction Corporation, slip op. No. 78 C 32218 (N.D.Ill. October 2, 1979) ("likelihood of confusion is increased by the fact that Plaintiff's mark is a strong mark entitled to a broad scope of protection").

2) Similarity in appearance, sound, and meaning. The identical dominant term "Century" is the lead word in each entity's name, which can foster confusion. Also, the district court judge, who had the opportunity to view examples of both parties' yard sign designs, found them to be sufficiently similar to hazard confusion.

3) Class of goods in question. The goods--real estate properties and real estate brokerage services--are essentially the same.

4) Marketing channels. Both Century 21's and Century Investments & Realty's marketing channels are substantially the same: local listings, yard signs, advertising.

5) Evidence of actual confusion. Sandlin, himself, made several slips of the tongue during the summary judgment hearing. At least twice, while arguing his position to the district court, Sandlin referred to "Century 21" when he meant to say "Century". The district court found at least one other instance of actual confusion, in which a couple listed their home with Sandlin, believing him to represent Century 21. Sandlin's dispute of this finding--contending that the confusion was due to the incorrect telephone listing, over which he had no control--does not change the outcome, since actual confusion need not be shown. J.B. Williams, 523 F.2d at 191 n. 5.

6) Evidence of defendant's intention.

By his own admission, Sandlin chose his new dba in order to benefit from his former affiliation with Century 21. In a letter to Century 21's attorney, Sandlin stated:

... I chose to use Century as part of my new business DBA CENTURY INVESTMENTS & REALTY for the following reasons: ... 2 ... I needed something that would lead [my customers] to my new DBA. In order to stimulate their memory and to provide a trail (so to speak) to follow to get my new DBA so they can then call me, I came to the conclusion that I needed the word CENTURY as the first word of the new DBA ... they can find my new DBA by the process of elimination. In this area I will be the only non Century 21 real estate office using the word "CENTURY" as part of their DBA ... . I DO WANT TO PROVIDE A WAY TO STIMULATE MY CLIENTS MEMORY SO THEY CAN FIND...